NEW DELHI: Suresh Prabhu is set to play a key role in drafting policy on natural resources and infrastructure in the Narendra Modi government. The Shiv Sena member has been given an office in South Block, where the Prime Minister’s Office is located, and is expected to be given cabinet rank.
Prabhu is also expected to look after the organisation that will succeed the Planning Commission while continuing to head the advisory group for integrated development of power coal and renewable energy.
When the Modi government took charge this year, many had expected a cabinet position for Prabhu, who’s known for shepherding the Electricity Act that formed the backbone for power sector reforms. In September, the government decided to elevate Prabhu but it took a while to formalise his role due to finance minister Arun Jaitley having to take time off for health reasons and assembly elections in Maharashtra and Haryana.
He held a meeting of experts, economists and officials on Saturday at the Prime Minister’s Office on Saturday, said government sources.
While refusing to confirm or deny a possibility of his possible induction in the cabinet, Suresh Prabhu said: “The only person with the prerogative to decide that is Mr. Narendra Modi.”
“Prabhu is set to play a key role in the Modi government once his appointment is notified officially. He is in the process of shifting his base to New Delhi from Mumbai as his engagements are on the rise in the national capital,” said one of his close associates.
He’s known for holding Modi in high regard. Prabhu, along with industrialist Gautam Adani, did not attend the Wharton Economic Forum in March last year to protest against the cancellation of Modi’s keynote address. He had found the decision “ridiculous”.
In the past, Prabhu has held important portfolios in the central government, including power, industry, environment, chemicals and fertilisers, heavy industry and public enterprises.
A chartered accountant, law graduate and research scholar, in June Prabhu was made the head of the advisory group for integrated development of power, coal and renewable energy that seeks to put ailing sectors back on track. The government is expected to draw from Prabhu’s experience.
“Prabhu was a frequent visitor to Gujarat and worked closely with then chief minister Modi on several issues, including promotion of renewable energy. His experience in handling ministries such as power, environment and forests, industry, chemicals and fertilisers, heavy industries and public enterprises will be useful for the Modi government,” said the person cited above. He added that Prabhu, who is spearheading Modi’s agenda for the G-20 meeting in Australia, visited that country recently to prepare the ground for the PM’s trip.
In an ET interview in May, Prabhu said the government should get more than 100 projects worth Rs 7 lakh crore moving again and usher in a new policy paradigm to boost infrastructure investment to $10 trillion in three decades.
He had also suggested that in order to boost employment opportunities, a key plank of the Modi campaign, laws that obstruct labour-intensive industries need to be reviewed so that India can develop industrial clusters as in China. He also finds mining a “necessary evil” but feels that proper distribution of royalty can curb local unrest.
Prabhu is a strong advocate of introducing reforms in the government decision-making process. He wants parliament and its committees — and not just ministries — to play a key role in formulating policies. He’s in favour of empowering committees consisting of members of Parliament from different parties to come up with foolproof guidelines to introduce transparency and avoid controversies. In the past, Prabhu has chaired the task force for interlinking of rivers, a post with cabinet rank.
(Source: The Economic Times, November 6, 2014)
GOVT READY TO PRIVATISE SICK PSUs, SAYS JAITLEY
NEW DELHI: Finance Minister Arun Jaitley on Wednesday said the government would look at privatising some of the loss-making public-sector undertakings (PSUs), as supporting those for long with taxpayers’ money was not possible.
“Certainly, I am open to looking at some PSUs that could do better in private hands,” Jaitley said at the India Economic Summit, organised by the World Economic Forum. “They are being sustained merely on government support. That is not a long-term solution. Taxpayers cannot pay for loss-making businesses.”
Certain PSUs were on the verge of closing down and people were going to lose employment, said the finance minister, adding if the choice was between these businesses continuing in their present form, and getting privatised, the second option would be preferable.
Four PSUs were beyond revival, so would have to shut down, Jaitley had told Parliament in July. As many as 79 PSUs were making losses and the public investment in these firms was to the tune of Rs 1.57 lakh crore.
Interacting with Klaus Schwab, founder & executive chairman of the World Economic Forum, Jaitley said the government was following the approach of divestment, and not outright privatisation, for other PSUs.
With regard to foreign investors, the government would follow a sectoral approach. Jaitley was hopeful of Parliament’s approval to the Insurance Bill, which seeks to raise foreign investment cap in the sector to 49 per cent, in the winter session.
As some experts have criticised the government for not going for big reforms despite a clear mandate, Jaitley said reforms were not about one sensational idea; implementing reforms was more challenging in a developing society, as public opinion could not be confronted, and doubts had to be cleared.
Commenting on the bottlenecks created by the land acquisition law, Jaitley said he had no quarrel with an increase in compensation but he would focus on easing the procedure. He talked about the need to deal with the provision disallowing private schools, hospitals and hotels on land acquired by the government, as those would make building smart cities difficult.
He also explained in detail India’s position on trade facilitation, saying there was no ideological opposition to this issue. Even without a commitment to the World Trade Organizaion, India would unilaterally support moves to facilitate trade. But a solution to the dispute regarding holding of food stocks by India was required, he said, adding that the peace clause should not be phased out till this dispute was settled.
Asked how the new government planned to tackle the systemic failure caused by corruption, the finance minister said the government’s actions, such as those on coal ordinance, were aimed at eliminating discretion. Similar reforms were being planned for other minerals as well, he said.
At the end of the session, Jaitley’s message to foreign and Indian industry was: “We are waiting for you.”
(Source: Business Standard, November 6, 2014)
MODI LOOKS TO HOST GLOBAL CEOS AT ‘DAVOS OF THE EAST’
AHMEDABAD: In what can be seen as a bid to portray Narendra Modi as a emerging world leader, the Prime Minister will play host to the chief executive officers (CEOs) of Fortune 500 companies from across the globe in January next year.
Invitations for the first-time Global CEO Conclave — to be hosted as part of the seventh edition of the Vibrant Gujarat Summit on January 11 — has already been sent to about 150 personalities and organisations like former US President Bill Clinton; Microsoft co-founder Bill Gates; World Bank president Jim Yong Kim; International Monetary Fund managing director Christine Lagarade; Asian Development Bank president Takehiko Nakao; General Electric CEO Jeff Immelt; Amazon founder, chairman and CEO Jeff Bezos; Michael Dell, CEO, Dell Corporation; Mary T. Barra; CEO, General Motors Virginia Rometty; chairperson, IBM, Jonathan Lu; CEO, Alibaba Group; and Mark Zuckerberg, chairman and CEO, Facebook Inc, among others.
Confirmations to the event, already being touted as the ‘Davos of the East’, is expected from next week. If things fall in place, the Prime Minister could also host dinner for the global CEOs and leaders.
The Prime Minister will also meet and address world leaders from the UN, the IMF, the World Bank, the Asean, the ADB and the Bill Clinton Foundation, apart from Nobel laureates and economists. The conclave will be held at the Pandit Deendayal Petroleum University in Gandhinagar, right after the inaugural session of Vibrant Gujarat Summit 2015.
The conclave would be held immediately after the inaugural ceremony of the summit. On the following two days — January 12 and 13 — country and state seminars, apart from B2B meetings as well as theme-based seminars such as one on SMEs, international finance, smart cities, sustainable energy and world innovation, will be held. Investments, however, will not be the primary focus of the conclave. Instead international issues such as climate change, sustainable development and new millennium goals for corporations and governments alike will be discussed.
The Gujarat government is also working on setting up a specific theme for the conclave.
“We shall not focus on investments for the Global CEO Conclave. It will be an extension to the Vibrant Gujarat Summit. For the first time, we will provide a global platform like Davos for the PM to interact with world leaders. We have also requested the PM to host the dinner for global leaders after the conclave. We are waiting for his approval,” said a senior officer of the Gujarat government.
Mooted by Modi about three to four months ago, the conclave got a nod from the PMO only on October 31, following which invitations been sent out.
According to the government official, while the previous Vibrant Gujarat Summits were global business platforms, the one next year will no more be a place for investments.
“We want the event to emerge as a platform to discuss global issues. We are portraying it as the Davos of the East,” the officer stated.
Davos is a mountain resort in the Alps region of Switzerland. It hosts the annual winter meeting of World Economic Forum, which is attended by thousands of business and political leaders, along with journalists and intellectuals. International issues like health and environment are discussed. Earlier, as the chief minister of Gujarat, Modi had described the Vibrant Gujarat Summit as “Davos in action”.
(Source: Business Standard, November 6, 2014)
INDIA INC BATS FOR RATE CUT BY RBI
NEW DELHI: India Inc on Wednesday pitched for a rate cut by the Reserve Bank of India (RBI), saying the central bank should be “more courageous”, since inflation had come down drastically and growth is not picking up. RBI is slated to come out with its policy review on December 2.
“RBI has to be more courageous,” said Anand Mahindra, chairman and managing director of Mahindra & Mahindra, at a session during the India Economic Summit, organised by the World Economic Forum and the Confederation of Indian Industry (CII), here on Wednesday.
Mahindra said RBI Governor Raghuram Rajan had told him he was more concerned about core inflation than the headline number.
However, core inflation has also come down to only a little over five per cent in retail price index terms, Mahindra added. He noted in the past the central bank was unable to bring down the rate due to high inflation.
“The need of the hour has changed and it is time to start looking to support growth,” Mahindra said.
Harvard University professor Gita Gopinath said it was not a question of being courageous. She, however, agreed there was an environment for interest rates to be brought down since inflationary expectations had.
She favoured RBI policy till now, since there is a tendency in India for food inflation to become generalised.
Uday Kotak, executive vice-chairman and managing director of Kotak Mahindra Bank, said: “My view is RBI should be considering a repo rate cut between December (2014) and February (2015).”
He said there are a large number of “schooled” people in the country but not “educated”.
“I am ashamed to say that both my children studied under-graduation courses overseas because we felt it was better for them,” said Kotak, according to a PTI report.
Ajit Gulabchand, chairman and managing director of Hindustan Construction Company, said interest rates were too high and hurting investments.
Rahul Bajaj, chairman of Bajaj Auto, said it was RBI’s prerogative to take a call on interest rates and he would not like to comment on it.
However, CII president Ajay Shriram said effecting half a percentage cut in the interest rate would improve investment sentiment.
Inflation, both in terms of Wholesale Price Index (WPI) and Consumer Price Index (CPI), has been declining in recent months.
WPI inflation touched a five-year low of 2.38 per cent in September, while the rate of rise on the basis of CPI fell to its lowest level of 6.46 per cent in the month. RBI has set a target of controlling CPI inflation at eight per cent by January 2015 and six per cent a year later.
It is the six per cent target RBI is more concerned about.
However, industrial growth declined to below one per cent in July and August, which could have repercussions for economic growth in the second quarter of the current financial year. The growth increased to a two-year high of 5.7 per cent in the first quarter.
Rajan has withstood pressures from several quarters for cutting the repo rate. This is despite five of the seven members of the technical advisory committee of RBI seeking an interest rate cut during its September meeting.
(Source: Business Standard, November 6, 2014)
MINISTRY TO REVIVE 34 HIGHWAY PROJECTS WORTH RS 26,000 CRORE
NEW DELHI: The highways ministry has showcased revival of 34 projects worth more than Rs 26,000 crore in its latest presentation on infrastructure targets to Prime Minister Narendra Modi, saying the projects spanning over 4,084 km are being restructured or converted from public-private partnership to engineering, procurement and construction (EPC) mode to get them going.
Of these, five projects have been handed over to the state governments concerned while another 18 will be awarded in EPC mode.
“The ministry can sanction projects up to Rs 1,000 crore in EPC mode without the cabinet approval. The strategy now is to divide projects into smaller parcels wherever possible and speed up the execution,” said a senior National Highways Authority of India official, who did not wish to be identified.
The Prime Minister has set a target of awarding projects for the construction of 8,500 km of highways by the end of March 2015. Against a target of 9,638 km during 2013-14, the previous government managed to award projects for only 3,169 km.
Several restructured projects are awaiting clearances from competent authorities such as the PPP appraisal committee for award under the build-operate-transfer (BOT) mode on toll basis.
Most of the projects will, however, be awarded in EPC mode after inviting bids since the private sector investment in the highway sector is losing its sheen.
The Centre has terminated contracts for 36 highway projects over the past two years. The delays in the projects due to lack of clearances and land acquisition escalated the costs, rendering them unviable for most companies. The highways ministry is also trying to estimate the escalation in the cost of these projects due to the delays.
Road transport and highways minister Nitin Gadkari recently said that the government is preparing to attract investment of Rs 5 lakh crore in the next five years and approve nearly 500 road projects to be awarded. About 189 highway projects involving investments of nearlyRs 1,80,000 crore are stuck due to problems of land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail overbridges. Officials of the ministries of highways and railways had met last month to resolve interministerial issues which had delayed highway projects across the country.
(Source: The Economic Times, November 6, 2014)
